In response to reports published on May 15 about a potential material impact on its financial performance due to issues related to a specific customer, Persistent Systems issued a statement.
The company reiterated its policy of not commenting on individual client matters. However, it assured investors that there has been no event that would materially affect the company’s financial performance.
ALSO READ | Persistent Systems shares fall after key US client faces major headwinds
The Wall Street Journal reported that UnitedHealth is currently under investigation for a potential Medicare fraud. In response, UnitedHealth shares fell 8% in extended trading on Wall Street, having declined 18% on Tuesday and close to 1% on Wednesday as well. The stock has declined for seven straight trading sessions.
US-based UnitedHealth, a manager of organised health systems, is a key client for Persistent and falls into the $100 million-plus relationship category, according to brokerage firm Dolat Capital.
The company, which is also the largest constituent on the Dow Jones Industrial Average Index in terms of weightage, has been facing multiple headwinds over the last few months, according to multiple reports.
Last month, the company had cut its Earnings per Share (EPS) guidance for the full year. Last week, the company suspended its guidance and also let go of its CEO, saying he had quit for personal reasons.
Dolat Capital mentioned that 60% of Persistent Systems’ revenue in financial year 2025 came from the healthcare segment and that near-term growth of the company will be skewed towards non-healthcare clients.
The brokerage also said that rich valuations for Persistent pose a significant risk. Persistent Systems is currently trading at a financial year 2027 price-to-earnings multiple of 40.4 times, which is lower than the five-year average of 62.8 times.
Out of the 23 analysts that have coverage on Persistent Systems, 13 of them have a “buy” rating on the stock, while seven have a “hold” rating. Three of them have a “hold” recommendation.
Shares of Persistent Systems settled 1.42% lower on Thursday at ₹5,676.50. The stock is down 12% so far in 2025.
